A Minnesota law that imposed permanent injunctions against the publication of newspapers with "malicious, scandalous, and defamatory" content violated the First Amendment, as applied to the states by the Fourteenth. Minnesota Supreme Court reversed.

The paper claimed that Jewish gangs were "practically ruling" the city along with the police chief, Frank W. Brunskill, who was accused of participation in graft. Among the paper's other targets were mayor George E. Leach, Hennepin County attorney and future three-term governorFloyd B. Olson, and the members of the grand jury of Hennepin County, who, the paper claimed, were either incompetent or willfully failing to investigate and prosecute known criminal activity.

Shortly after the first issue was distributed, Guilford was gunned down and hospitalized, where a further attempt on his life was made. At least one of the stories printed in The Saturday Press led to a successful prosecution of a gangster called Big Mose Barnett who had intimidated a local dry cleaner by destroying his customers' clothing.

Olson filed a complaint against Near and Guilford under the Public Nuisance Law of 1925.[3] Also known as the "Minnesota Gag Law", it provided permanent injunctions against those who created a "public nuisance," by publishing, selling, or distributing a "malicious, scandalous and defamatory newspaper." Olson claimed that the allegations raised against him and the other named public officials in all nine issues published between September 24, 1927, and November 19, 1927, as well as the paper's overall anti-Semitic tone, constituted a violation of this law. On November 22, 1927, Judge Matthias Baldwin of the Hennepin County District Court issued a temporary injunction that barred the defendants from editing, publishing, or circulating The Saturday Press or any other publication containing similar material. This injunction was granted without notice to either defendant on an ex parte hearing between Olson and the judge, and was to extend until the hearing on the judge's order for the defendants to show cause as to why they should not be permanently enjoined from publishing their paper. The hearing was held December 9, and future Minneapolis mayor, Thomas Latimer, argued that the defendants' activities were protected by the U.S. and Minnesota constitutions and demurred to the complaint.

The State Supreme Court wrote that a scandalous publication "annoys, injures and endangers the comfort and repose of a considerable number of persons," and so constituted a nuisance just as surely as "places where intoxicating liquor is illegally sold," "houses of prostitution," "dogs," "malicious fences" "itinerant carnivals," "lotteries," and "noxious weeds." The court considered that a newspaper may also endanger safety, because "scandalous material" tended to disturb the peace and provoke assaults. The court cited previous Minnesota decisions that upheld the right of the state to enjoin the publication of "details of execution of criminals" and the teaching of "things injurious to society." Restricting the publication of a newspaper based on its harmful content accordingly fell within the legitimate power of "the people speaking through their representatives" to preserve "public morals" and the "public welfare." The court stated that it had to give heavy deference to such decisions, because "[i]t is the prerogative of the legislature to determine not only what the public interests require but also the measures necessary to protect such interests."

Regarding Near and Guilford's defense of freedom of the press under article 1, section 3 of the Minnesota Constitution, the State Supreme Court did not believe that the right was intended to protect the publishing of "scandalous material", but that it only provided "a shield for the honest, careful and conscientious press," not the "defamer and the scandalmonger." Instead, "[h]e who uses the press is responsible for its abuse." The court also ruled that the state constitution's due process clause did not extend any additional protection.

The case then returned to the Hennepin County District Court, and Near and Guilford renewed their objection to the constitutionality of the Public Nuisance Law. Judge Baldwin again overruled their objection. Only the verified complaint that Olson had filed and the newspaper issues themselves were entered as evidence, and the defendants did not try to argue that the Saturday Press did not fit the definition under the statute, or that their published stories were in fact true. Baldwin ruled that the newspapers contained nothing but scandalous and defamatory material, and permanently enjoined the defendants "from producing, editing, publishing, circulating, having in their possession, selling or giving away any publication whatsoever which is a malicious, scandalous or defamatory newspaper, as defined by law," and also "from further conducting said nuisance under the name and title of said 'The Saturday Press or any other name or title."[4]

On appeal once again, the Minnesota Supreme Court ruled that its first decision left little question as to the constitutionality of the statute, both under the defendants' state constitutional challenge and a new argument based on due process under the 14th Amendment to the U.S. Constitution. The defendants also argued that the trial court's injunction went too far because it effectively prevented them from operating any newspaper, but their appeal did not request a modification of the order. The court in any case disagreed with their interpretation of the order's scope, stating that it did allow them to publish a newspaper, so long as it was operated "in harmony with the public welfare."

Only Near appealed from this decision to the U.S. Supreme Court, thanks to last-minute financial help from Col. Robert R. McCormick, the legendary publisher of the Chicago Tribune. This time, the Court, by a narrow 5-4 margin reversed the decision of the Minnesota Supreme Court and ruled that the Public Nuisance Law of 1925 was unconstitutional. The reversal was based largely on changes to the makeup of the Supreme Court between the two arguments. A quotation from the decision written by Hughes is engraved in the lobby of the Tribune today.

"For these reasons we hold the statute, so far as it authorized the proceedings in this action under clause (b) [723] of section one, to be an infringement of the liberty of the press guaranteed by the Fourteenth Amendment. We should add that this decision rests upon the operation and effect of the statute, without regard to the question of the truth of the charges contained in the particular periodical. The fact that the public officers named in this case, and those associated with the charges of official dereliction, may be deemed to be impeccable cannot affect the conclusion that the statute imposes an unconstitutional restraint upon publication."

This case strengthened the notion that a prior restraint of the press violates the First Amendment. However, it left a loophole which would be used later for other prior restraint cases, citing certain circumstances in which prior restraint could potentially be used:

"The objection has also been made that the principle as to immunity from previous restraint is stated too broadly, if every such restraint is deemed to be prohibited. That is undoubtedly true; the protection even as to previous restraint is not absolutely unlimited. But the limitation has been recognized only in exceptional cases. 'When a nation is at war many things that might be said in time of peace are such a hindrance to its effort that their utterance will not be endured so long as men fight and that no Court could regard them as protected by any constitutional right.' (Schenck v. United States). No one would question but that a government might prevent actual obstruction to its recruiting service or the publication of the sailing dates of transports or the number and location of troops. On similar grounds, the primary requirements of decency may be enforced against obscene publications. The security of the community life may be protected against incitements to acts of violence and the overthrow by force of orderly government."

Hughes (Ct): "...the fact that liberty of press may be abused does not make any less necessary the immunity of the press from prior restraint...a more serious evil would result if officials could determine which stories can be published..."

Guilford later joined the staff of the Twin City Reporter. He continued to draw the ire of organized crime in Minneapolis and was shot and killed on September 6, 1934.

The Court closed off one of the few outlets remaining to censor the press under Near in New York Times Co. v. Sullivan, which seriously limited the grounds upon which a public official could sue for libel. Statements made regarding their official conduct were only actionable if made with "actual malice," meaning a knowing or reckless disregard for the truth.

^Lewis, Anthony (1991). Make No Law: The Sullivan Case and the First Amendment. New York: Random House. p. 90. ISBN0-394-58774-X.

^By Fred W. Friendly in Minnesota Rag: Corruption, Yellow Journalism, and the Case That Saved Freedom of the Press, his book on the case.

^The law was passed to suppress Ripsaw, a newspaper first published in 1917 by a self-proclaimed Christian reformer in Duluth, Minnesota who criticized local business and politics. The city was at the heart of the "Iron Range", a region integral to the nation's steel interests, and so the paper's editorial attacks on local leaders eventually motivated members of the Minnesota Legislature from Duluth to pass the law. Ripsaw was the first target to be prosecuted under the new law, but its publisher died before his first day in court.

^The description of the proceedings after remand were found in the brief of the Minnesota attorney general to the U.S. Supreme Court, which offered a more detailed description though did not appear to contradict Near's account in his own brief. The order granting and describing the permanent injunction was quoted in the U.S. Supreme Court's opinion.